1 / 65

Agenda

Agenda. 1. OIL INDUSTRY OVERVIEW. 2. IOC - OVERVIEW. 3. IOC – KEY CREDIT STRENGTHS. 4. STRATEGIC INITIATIVES. 5. STRONG FINANCIAL POSITION. Agenda. 1. OIL INDUSTRY OVERVIEW. 2. IOC - OVERVIEW. 3. IOC – KEY CREDIT STRENGTHS. 4. STRATEGIC INITIATIVES. 5. STRONG FINANCIAL POSITION.

loring
Télécharger la présentation

Agenda

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Agenda 1. OIL INDUSTRY OVERVIEW 2. IOC - OVERVIEW 3. IOC – KEY CREDIT STRENGTHS 4. STRATEGIC INITIATIVES 5. STRONG FINANCIAL POSITION

  2. Agenda 1. OIL INDUSTRY OVERVIEW 2. IOC - OVERVIEW 3. IOC – KEY CREDIT STRENGTHS 4. STRATEGIC INITIATIVES 5. STRONG FINANCIAL POSITION

  3. Regulatory Environment

  4. De-regulation History • Import of Gasoline, HSD and ATF allowed to companies having marketing rights • Phased reduction in subsidies for LPG and Kerosene • FDI in Marketing, E&P and Pipelines increased to 100% subject to certain approvals • Marketing rights granted to private sector entities for marketing of transportation fuels through their own retail network • w.e.f April 1, 2001 • Oil Co-ordination Committee dismantled w.e.f. April 1, 2002 • Dues of Oil companies under Oil Pool Accounts settled on provisional basis • Majority of products made freely tradable • Pricing of all products except LPG and Kerosene decontrolled • Pipeline transportation tariff decontrolled w.e.f. April 1, 2002 • DE-REGULATION OF REFINERIES • Refining sector removed from APM regime • All products except Gasoline, Gas oil, ATF, LPG and Kerosene decontrolled • Private companies allowed to import crude oil • FDI in refining sector raised from 49% to 100% • Stand-alone refining companies aligned with existing integrated refining and marketing companies 2001 1998 1999 2000 2002 2003 2004 2005 Committee constituted by MOP&NG in Oct’05 to examine different aspects relating to pricing and taxation of petroleum products

  5. Post De-regulation Industry Dynamics

  6. Industry Structure Oil & Natural Gas Corporation Ltd. UPSTREAM (Exploration & Production) ONGC Videsh Ltd. Oil India Ltd. Reliance, Cairn Energy, HOEC, Premier Oil Indian Oil Corporation Ltd. DOWNSTREAM (Refining & Marketing) IBP Ltd. (Pure Marketing) Chennai Petroleum Corporation Ltd. (Pure Refining) Bongaigaon Refinery & PetrochemicalsLtd. Hindustan Petroleum Corporation Ltd. Mangalore Refinery & Petrochemicals Ltd.* Bharat Petroleum Corporation Ltd. Kochi Refinery Ltd. (Pure Refinery) Numaligarh Refinery Ltd. (Pure Refinery) Reliance Industries Ltd./ Essar Oil Ltd. (Gas Transport & Distribution) GAIL (India) Ltd. * Subsidiary of ONGC

  7. Industry Dynamics* Market Size 2.3 MBPD Refining Capacity 2.6 MBPD Product Pipelines 1.24 MBPD Crude Pipelines 0.6 MBPD IOC is the only downstream company that owns crude pipelines Share includes subsidiary companies * As on 31st March’05

  8. Petroleum Products – Historical Demand Growth • Consumption and Production grew at a CAGR of 2.79% and 4.78% respectively over the last 5 years • Demand expected to grow at a CAGR of 3.7% during X plan period (2002-03 to 2006-07) Source: PPAC

  9. Domestic Crude Availability* The gap being met through imports *Including condensate ** Refining capacities as on 1st April

  10. Agenda 1. OIL INDUSTRY OVERVIEW 2. IOC - OVERVIEW 3. IOC – KEY CREDIT STRENGTHS 4. STRATEGIC INITIATIVES 5. STRONG FINANCIAL POSITION

  11. Corporate History Indian Refineries Ltd. 1958 Indian Oil Company 1959 Merger Indian Oil Corporation Limited 1964 • Assam Oil Company taken over in 1981 • Navratna Board constituted in 1999

  12. Facilities

  13. (‘000 BPD) • FY’04 FY’05 Growth • Refining Thru’put 753 733 (2.73)% • Product Sales Volume* 992 1,023 3.13% • Pipeline Thru’put 922 878 (4.74)% • Fortune “Global Rank” improved to 170 in the current year from 189 in the previous year and 191 a year before. • Consistently “AAA” rated by ICRA since the beginning. • International credit rating from Moody’s and Standard and Poors – Baa3 by Moody’s and BB+ from Standard and Poors. Overview * Including exports

  14. Refineries - Overview Key Facts • Owns 7 refineries with 830 TBPD cap. – 32.5%REFINING SHARE • 67% capacity catering to northern/western region - HIGH DEMAND & GROWTH AREAS • All refineries linked by crude pipelines - LOW TRANSPORTATION COST • All refineries linked by product pipelines- MOST COST EFFECTIVE EVACUATION SYSTEM • Potential for brownfield expansions in least time Bhatinda Digboi Panipat Bongaigaon Mathura Numaligarh Barauni Guwahati Bina Koyali Haldia Jamnagar Mumbai Paradeep IOC’s Refineries Existing Under Construction / Proposed Subsidiary Companies Vizag Other Companies’ Refineries Existing Under Construction/Proposed Chennai Mangalore Cuddalore Narimanam Cochin As on 1 April’05

  15. Performance - Refineries • Highest ever GRM • Refining margins in tandem with international margins • Refineries accounts for about 78% of IOC’s earnings during FY 05 • Margin enhancement opportunities thru’ stream sharing & improving crude/supply logistics.

  16. Pipelines - Overview Key Facts • 7,730 kms. of crude / product pipelines with a capacity of 1186 TBPD • Owns approx. 66% of total throughput capacity (downstream) • Low cost crude transportation to all refineries • Low cost evacuation system linked to all refineries • Two SBM near Vadinar Jalandhar Bhatinda Saharanpur Meerut Nahorkatiya Panipat Delhi Tinsukia Rewari Bongaigaon Mathura Siliguri Jodhpur Lucknow Tundla Digboi Chaksu Barauni Guwahati Kanpur Kot Sidhpur Ahmedabad Kandla Vadinar Koyali BudgeBudge Salaya Navgam Haldia Manmad IOC’s Pipelines Vizag Mumbai Product Proposed Product Crude Oil Proposed Crude Vijayawada Chennai Other Companies’ Pipelines Product Proposed Product Crude Oil Karur Madurai Kochi As at 1 April, 2005

  17. Pipelines - Significant Upside Significant increase in pipelines earnings due to recovery of tariff based on rail freight (1) Source: Company estimates (2) USD = Rs.43.75

  18. Marketing Overview IOC IBP Others TOTAL IOC %* • LPG Distributors 4699 88 4214 9001 53 • SKO/LDO Agents 3555 380 2653 6588 60 • Depots/Terminals 158 17 204 379 46 • LPG Bottling Plants 87 0 82 169 51 • Aviation fuel stations 95 0 29 124 77 • Retail Outlets 10,228 3,272 13,825 27,325 49 IOC has a dominant share in marketing infrastructure in all segments As of 31 March 2005 * IOC % includes IBP

  19. Marketing - Control Retail Outlet Sites IOC is focused on strengthening its position and control in the retail segment IOC Retail Outlets % of Retail Outlet sites owned / taken over long lease 3272 retail outlets of IBP – 61% company owned / taken over long lease

  20. Research and Development Centre • A premier R&D institute of India with focus on: • Lubricants Technology-over 2000 formulations developed, 450 commercial grades of lubricants/greases available • Novel Refining Process Technology • Green-fuel & environmental issues • Over 228 patents filed and 142 granted • National Award (for science & technology) for 2004 towards successful commissioning of Indigenous INDMAX technology. • Development & marketing of alternative fuels: Ethanol Blended & Bio-Diesel. • Marketing of technology, expertise, knowledge and innovation through Indian Oil Technologies Ltd. a wholly owned subsidiary.

  21. Environmental Issues

  22. Proactively Addressing Environmental Issues IOC has proactive plans to meet the prospective Euro / Bharat norms Road Map to Vehicular Emission Norms Euro II Euro III Euro IV Metros Introduced April 2005 April 2010 Mega Cities* April 2003 April 2005 April 2010 Entire Country April 2005 April 2010 IOC Investment Plans** USD/million HSD Quality Improvement 509 MS Quality Improvement 333 TOTAL INVESTMENT FOR EUROIII COMPLIANCE 842 IOC shall be able to meet the environmental regulations well in time *Bangalore, Hyderabad, Pune, Ahmedabad, Surat, Kanpur, Agra ** Approved cost

  23. Corporate Governance

  24. Strong Corporate Governance IOC being one of the “Navratna” strives to attain the highest levels in Corporate Governance and Transparency • The “Navratna” status gives IOC’s management significant independence in conducing day-to-day operations • Fully complies with the stipulations laid down on Corporate Governance in the Listing Agreement • The Board consists of optimum combination of Executive and non-Executive Directors • Presently, out of 17 directors, 9 are non-executive, independent directors • Remuneration for whole-time directors is decided by the Government of India • Fully independent and active Audit Committee • Audit Committee consists of three non-executive independent directors

  25. Agenda 1. OIL INDUSTRY OVERVIEW 2. IOC - OVERVIEW 3. IOC – KEY CREDIT STRENGTHS 4. STRATEGIC INITIATIVES 5. STRONG FINANCIAL POSITION

  26. Key Credit Strength - Integrated Operations REFINING • Controls 10 Refineries with a capacity of 1088 TBPD PIPELINES • 4,917 km of product (capacity of 29.85 mmtp) • 2,813 km of crude oil (capacity of 28.5 mmtp) • All refineries linked to pipelines MARKETING • Leading marketer in India • Market share of 48% (including IBP) • Controls over 50% of marketing infrastructure Being an integrated player, IOC is insulated to some extent from oil price fluctuations.

  27. India’s #1 Downstream Company (USD/billion) FY’04 FY’05 Rank Turnover 29.80 34.44 1 Net Profit 1.60 1.12 1 Net Worth 5.27 5.94 1 Total Assets* 12.31 14.64 1 Market Capitalization (31st March) 13.26 11.69 1 • India’s ‘No. 1 Corporate’ in annual listing of both Business World & Business India, for 2004 • India’s largest downstream oil company • 18th largest oil company in the world- Fortune Global 500 * Excluding depreciation & misc. expenditure

  28. Key Inherent Corporate Strengths • Growing economy to drive demand of petroleum products • Strategically located inland refineries near high demand centres • Dominant market share • Unparalleled infrastructure in all segments • Backed by world class R&D facilities • Strong export potential to neighboring countries • Focused strategy and management commitment to effectively manage change and enhance profitability and shareholder’s value

  29. Strong Support from GOI It is Government’s stated objective to maintain a majority shareholding in this company of strategic importance for the country • The Government of India is the majority shareholder with 82% of shares directly held IOC functions under the administrative control of the Ministry of Petroleum & Natural Gas. As at March 31, 2005 * Including employees

  30. Agenda 1. OIL INDUSTRY OVERVIEW 2. IOC - OVERVIEW 3. IOC – KEY CREDIT STRENGTHS 4. STRATEGIC INITIATIVES 5. STRONG FINANCIAL POSITION

  31. Strategic Initiatives

  32. Future Projections of IOC Where we intend to be A US $60 billion Global Integrated Energy Company by 2011-12 Where we are today A US $34 billion Company

  33. By 2011-12…….. Revenue Contribution Billion US $ Revenue Stream

  34. Optimizing Core Business - Initiatives

  35. Optimizing Core Business OBJECTIVES • Overall supply chain optimization • Provide inputs for review process of capital investments in Refineries, Pipelines, Marketing and other strategic issues SUPPORTING MODELS • Demand Forecasting • A tool supported by statistical forecast based on historical sales data • RPMS (Refinery & Petrochemical Modelling System) • A Refinery Planning tool for optimization of crude processing and product pattern within the constraints of a refinery • SAND (Supply and Distribution) • A planning tool for optimization of distribution logistics based on supply, demand and logistics constraints • IP (Integrated Planning) • Integrated planning tool encompassing all refineries and product distribution for overall supply chain cost optimization based on product demand

  36. Optimizing Core Business - Refining PLANS • Panipat (+) 3.0 MMTPA (from 12 to 15 MMTPA) • Haldia (+) 1.5 MMTPA (from 6.0 to 7.5MMTPA) • Paradip 15 MMTPA Grassroot Refinery with Petrochemical Complex FURTHER OPPORTUNITIES • Panipat (+) 6.0 MMTPA (from 15 to 21 MMTPA) • Mathura (+) 3.0 MMTPA (from 8 to11 MMTPA) • Gujarat (+) 4.3 MMTPA (from 13.7 to 18 MMTPA) Capacity Addition Increase in Margins (GRMs) CRUDE INPUT COST REDUCTION • Product Mix Improvement / Value Addition • Distillate yield improvement • LPG maximization • Enhancing HS crude processing capability • Shipping cost Optimization • Crude import in VLCC Parcel • Time Charter of VLCC • Contract of Affreightment

  37. Optimizing Core Business - Marketing • Retail initiatives • Distinctive Retail Network • Best in class Q&Q & service assurance measures • Premium fuels • Ambitious loyalty programs • Value adding facilities with best in class partners • Lubes – enhance Brand Value of SERVO through focused efforts • LPG • Bottling Quality improvement • Roll out of Star Distributorship Programme • Increase in non-domestic sales

  38. Diversification - Initiatives

  39. Petrochemicals • LAB at Gujarat commissioned in August 2004 – world’s largest single train Kerosene-to-LAB plant • World scale petrochemicals hub at Panipat • PX/PTA by 1st Quarter of 2006 • Naphtha Cracker & Polymer Complex by end 2008 • Propylene unit at CPCL • Paradip Complex approved in principle • Haldia Petrochemicals Ltd. – 10% Equity Stake

  40. Gas • Petronet LNG Ltd. – Dahej, Dahej Expansion & Kochi • Integrated LNG Project, Iran • MOU with Petropars signed on 1st Nov.’04 for developing and integrating projects in Iran. • MoU with GSPCL for joint development of KG Basin field • LNG import & regasification facilities at Ennore • Gas marketing in domestic market

  41. E & P • Initiatives • 11 NELP Blocks & 2 CBM Blocks • Farm-in: 2 exploration blocks (PremierOil); one exploration & one development block (HOEC) • Alliance with Oil India Ltd. • MoU signed for collaboration in upstream ventures overseas and specific domestic projects • IndianOil-OIL combine awarded 18.4% share in a Libyan Block • Opportunities being jointly pursued in Myanmar & Iran • Mergers & Acquisitions • To acquire a mid-size E&P company

  42. Globalization Initiatives

  43. Globalization Sri Lanka • Lanka IOC Pvt. Ltd. incorporated in 2002 (Now Lanka IOC Ltd.) • 170 Retail Outlets; 80 more in pipeline • Over 28% market share • Trincomalee Tankfarm • 1/3rd share in ‘Common Storage JV Company’ • Maiden IPO oversubscribed 11 times – a record in Sri Lanka Mauritius • IndianOil Mauritius Ltd. incorporated in 2002 • Terminalling & retailing of petro-products • Over 20% share of aviation business • 7% market share achieved in 2004-05 Dubai • Blending of SERVO lubricants commenced in June 2004

  44. Globalization (Cont’d) Exports • Term contracts for petroleum product export finalized for the ‘first time’ with Ceylon Petroleum Corporation (in Jul’02) and with Bangladesh Petroleum Corporation (in Mar’04) • SERVO lubricants being exported to more than 10 countries spread over SAARC, Middle East, South East Asia and Africa.

  45. Agenda 1. OIL INDUSTRY OVERVIEW 2. IOC - OVERVIEW 3. IOC – KEY CREDIT STRENGTHS 4. STRATEGIC INITIATIVES 5. STRONG FINANCIAL POSITION

  46. Financial Performance

  47. Summary Balance Sheet Hidden Reserves • Strategic investments in ONGC and GAIL – IOC holds 9.6% shares of ONGC, the flagship E&P company of India and 4.8% shares of GAIL, the only Gas marketing and pipeline company in India • Combined Market Value of IOC’s holding in ONGC and GAIL is US$ 3,546 million as on Sep’05 against investment of USD 550 million

  48. Summary Income Statement • Sales increased by over 16% • Decrease in profits mainly due to under recoveries on account of SKO/LPG and MS/HSD

  49. Key Ratio Analysis • IOC’s Stock is trading at around 7 times cash EPS, reflecting an earnings yield of 14% per annum post bonus

More Related